american demographics and stratas

PART II: EXTERNAL INFLUENCESPART II: EXTERNAL INFLUENCES

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CHAPTERCHAPTER 44THE CHANGING THE CHANGING

AMERICAN AMERICAN SOCIETY: SOCIETY:

DEMOGRAPHICS DEMOGRAPHICS AND SOCIAL AND SOCIAL

STRATIFICATIONSTRATIFICATION

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Consumer Behavior In The News…Consumer Behavior In The News…

Laundry Without Water? Laundry Without Water?

Tide launched Swash, a line of products to freshen Tide launched Swash, a line of products to freshen and de-wrinkle clothes without washing them.and de-wrinkle clothes without washing them.

Can you guess who the target market is?Can you guess who the target market is?

Baby BoomersBaby Boomers

Generation XGeneration X

Generation YGeneration Y

Source: “Laundry 101: No Water Necessary,” Business Week, November 19, 2007, p. 25.4-3

Consumer Behavior In The News…Consumer Behavior In The News…

Swash Target Market? Swash Target Market?

If you guessed If you guessed Generation YGeneration Y you were correct! you were correct! Specifically, the college-aged crowd.Specifically, the college-aged crowd.

As one expert explains: As one expert explains:

““It’s wise to go after young adults this way. A It’s wise to go after young adults this way. A loyalty to Tide may pay off later, when their loyalty to Tide may pay off later, when their domestic skills kick in.”domestic skills kick in.”

Source: “Laundry 101: No Water Necessary,” Business Week, November 19, 2007, p. 25.4-4

Demographics and Social StratificationDemographics and Social Stratification

Population and SizePopulation and Size

OccupationOccupation

EducationEducation

IncomeIncome

AgeAge

Demographics

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Occupational Influences on Consumption

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Education Level Influences on Consumption

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Demographics and Social StratificationDemographics and Social StratificationDemographics

AgeAge

U.S. Age Distribution1

Key Growth Categories

1“Resident Population Projections by Sex and Age: 2010 to 2050,” Statistical Abstract of the United States 2008 (Washington, DC: U.S. Bureau of the Census, 2008), Table 10.4-8


Age Influences on Consumption

18-24 25-34 35-44 45-54 55-64 65+

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Understanding American GenerationsUnderstanding American Generations

A Generation Generation or age cohort age cohort is a group of persons who have experienced a common social, political, historical, and economic environment.

Cohort analysisCohort analysis is the process of describing and explaining the attitudes, values and behaviors of an age group as well as predicting its future attitudes, values, and behaviors.

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Pre-DepressionPre-Depression

DepressionDepression

Baby BoomBaby Boom

Generation XGeneration X

Generation YGeneration Y

TweensTweens


Mature MarketMature Market

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How to Target the Mature Market

Gerontographics has identified the following four

segments of the mature market:

- Healthy IndulgersHealthy Indulgers - Ailing OutgoersAiling Outgoers - Health HermitsHealth Hermits - Frail Recluses

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Compared to prior generations, Boomers are:

Higher income, higher education

More tech savvy

Defining retirement differently

Boomers also are:

Strong market for “anti-aging” products, travel, and financial services

Often alienated by overly “youth oriented” appeals in ads

Baby Boom Generation: A Closer LookBaby Boom Generation: A Closer Look

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Beyond the stereotype:

Stereotype – Xers as disenfranchised youth

Reality 1– Xers are more highly educated than previous generations

Reality 2– Xer women are more highly educated than Xer men

Reality 3– Xers are getting married, having families and facing the time pressures associated with these events

Reality 4– Reaching Xers requires special attention to media, particularly online

Generation Xers: A Closer LookGeneration Xers: A Closer Look

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Interesting Facts About Gen Y:

Really Two Sub-Markets: Older teens & young adults

Expected to have the highest education of previous generations with incomes to follow

Very tech savvy with media options including Internet, cell phones, and video games

A strong market for automobiles with brands like Toyota creating edgy and affordable models such as the Scion to target them

Generation Yers: A Closer LookGeneration Yers: A Closer Look

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Applications in Consumer BehaviorApplications in Consumer Behavior

Palm Centro ad Palm Centro ad targets the active and targets the active and diverse “youth diverse “youth market.”market.”

Notice the use of Notice the use of texting and sports as texting and sports as “touch points.”“touch points.”

© 2007 Palm, Inc. All rights reserved.

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Social Rank and Social Class SystemSocial Rank and Social Class System

Status CrystalizationStatus Crystalization

The Derived Nature of Social ClassThe Derived Nature of Social Class

The Coleman-Rainwater HierarchyThe Coleman-Rainwater Hierarchy

The Measurement of Social ClassThe Measurement of Social Class

Social Stratification and Marketing StrategySocial Stratification and Marketing Strategy

Social StratificationSocial Stratification

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We are all familiar with the concept of social class, but most of us would have difficulty explaining our class system to a foreigner.

Social rankSocial rank is one’s position relative to others on one or more dimensions valued by society, also referred to as social class and social standing.

A social class systemsocial class system is a hierarchical division of a society into relatively distinct and homogeneous groups with respect to attitudes, values, and lifestyles. "Pure” social classes do not exist in the U.S. or most other industrialized societies.

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Status dimensions, such as parental status, education, occupation and income, set limits on one’s lifestyle, including one’s residence.

Status crystallizationStatus crystallization, which is moderate in the U.S., reflects the consistency of these status dimensions.

Web Web ExerciseExerciseWhat Social Class are You?What Social Class are You?

Play the “Chintz or Shag” Game from PBSPlay the “Chintz or Shag” Game from PBSClick button to link to PBS siteClick button to link to PBS site

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http://www.pbs.org/peoplelikeus/games

Social Structure in the United StatesSocial Structure in the United States

Social Standing is Derived and Influences BehaviorSocial Standing is Derived and Influences Behavior

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Social Structure in the United StatesSocial Structure in the United StatesThe Coleman-Rainwater Social Class HierarchyThe Coleman-Rainwater Social Class Hierarchy

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The Coleman-Rainwater Social Class HierarchyThe Coleman-Rainwater Social Class Hierarchy

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Upward Pull StrategyUpward Pull Strategy

Middle AmericansMiddle Americans

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There are two basic approaches to measuring social status:

- Single-item index- Single-item index

- Multi-item index- Multi-item index

Since an individual’s overall status is influenced by several dimensions, single-item indexessingle-item indexes are generally less accurate than are well-developed multi-item indexesmulti-item indexes.

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• Single-Item IndexSingle-Item Index EducationEducation

OccupationOccupation

IncomeIncome

• Marketers generally think of these as direct influencers of consumption behavior rather than determinants of status that then influence behavior.

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• Multi-Item IndexMulti-Item Index

Hollingshead Index of Social PositionHollingshead Index of Social Position

Index of Social Position (ISP)Index of Social Position (ISP)

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Social statusSocial status is largely derived from demographicsdemographics; that is, one’s income, education, and occupation go a long way toward determining one's social class or status.

Should marketers use an overall measure of social statussocial status (a multi-item index) or a demographicdemographic variable such as income?

Unless the marketer is interested in social standing per se, he/she will most likely focus on demographic characteristics as direct influencers on consumer behavior!

Demographics or Social Status?Demographics or Social Status?

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Social Stratification and Marketing StrategySocial Stratification and Marketing Strategy

While social stratification does not explain all consumption behaviors, it is certainly relevant for some product categories.

You can clearly see this by visiting a furniture store in a working-class neighborhood and then an upper-class furniture store.

A product or brand may have different meanings to members of different social strata, for example, a watch.

Likewise, different purchase motivations for the same product may exist between social strata.

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